The fundamentals of IT economics are not strong.  We have heard from dozens of IT organizations charged with building web-based business applications for their constituents that meeting all of their needs is simply not possible. This is why IT silos and rogue/situational applications occur. LongJump CEO Pankaj Malviya discussed this in The Long Tail of IT.

Yet many CIOs have yet to wake up to new ways to provide greater services while also lowering costs. The answer is to get your head in the cloud.

According to Goldman Sachs in their July 2008 IT Sales Opportunity survey of 100 CIOs, less than 2% of them said cloud computing was a priority. In fact, it was ranked last in a series of initiatives. Instead, their approach is to cut rather than invest modestly in these flexible services.

In an increasingly competitive business environment and with the emergence of cloud computing and its off shoot, platform-as-a-service (PaaS) solutions, these CIOs seem to be missing a bigger picture.

That’s because PaaS offers businesses a very demonstrable ROI while also strengthening operations an organization. Both these factors should have CIOs taking a closer look at PaaS not only for its economic benefits, but as an opportunity to improve information management and processes across the enterprise.

PaaS can add significant value to enterprise IT by enabling CIOs to better serve the business, operate at a more strategic level with business divisions and rapidly deliver application solutions to business partners. PaaS also provides a modest-cost approach to cloud computing that doesn’t require infrastructure procurement, datacenter overhead, and minimizes risk.

LongJump believes that PaaS can provide an economy of scale savings to businesses’ application initiatives immediately and in the long run. At the same time, organizations can improve their maturity level, delivery a greater breadth of services, and have more control over their information.

For more information about the economics of PaaS and Cloud Computing, I invite you to read our whitepaper: “PaaS-onomics: A CIO’s Guide to using Platform-as-a-Service to Lower Costs of Application Initiatives While Improving the Business Value of IT.“